Econ 214 Problem Set 1

Good Essays
Problem Set 1
Complete all questions listed below. Clearly label your answers.

1. The receipts and year of release of the five movies with the largest nominal box office revenues, along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release, convert the receipts for each to real dollars for the year 2010 (2010 CPI 218.1). Put the movies in order from largest to smallest real box office receipts.
Movies
Nominal
Box Office Receipts (millions)
Year Released
CPI in Year Released.
Avatar
$760.50
2009
214.5
Titanic
600.8
1997
160.5
Star Wars
461
1977
60.5
Shrek 2
437.2
2004
188.9
E.T. The Extra-Terrestrial
399.9
1982
96.5

ANSWER Using the formula: Real Price = (Nominal Price/Release CPI) x Real CPI
Movies
Nominal
Box Office Receipts (millions)
Year Released
CPI in Year Released
Real Price (2010)
Star Wars
$461
1977
60.5
$1661.87
E.T. The Extra-Terrestrial
399.90
1982
96.5
903.82

Titanic
600.80
1997
160.5
816.41
Avatar
760.50
2009
214.5
773.26
Shrek 2
437.20
2004
188.9
504.78

2. Classify each of the following as employed, unemployed, or not in the labor force.

a. Beth is not working; she applied for a job at Wal-Mart last week and is awaiting the result of her application.

Beth is considered unemployed. She is considered in the labor force, and she is not currently employed by any employer.

b. Juan is vacationing in Florida during a layoff at General Motors plant due to a model changeover, but he expects to be recalled in a couple of weeks.

Juan is unemployed. He is recently laid off, and even though he is prospectively becoming re-employed, his current status reads unemployment. c. Bob was laid off as a carpenter when a construction project was completed. He is looking for work but has been unable to find anything except a $10 per hour job which he turned down.

Bob was laid off and

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